That sounds fair - with the official rate as low as it is, even a margin of 3.8%pa would be reasonably cheap credit.
At the current price of $60.00, the yield is 7.6%pa unfranked (= 5.3% after 30% tax). At the stepped-up rate, the yield would be an impressive 11.3%pa (= 7.9%pa after 30% tax).
The big question is: can FXJ afford to keep paying interest on these preference shares?
fxjpb, page-15
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